Friday, July 14, 2006

Is Ald.Moore on Target with 'Big Box'?

.Daley, Alderman Oppose LegislationThough the fate of the controversial "big box" ordinance won't be decided until the next City Council meeting--at the earliest--the proposal may have claimed its first casualty this week when the construction of a Southwest Side Target store was put on hold.

Ald. Carrie Austin (34th) was irate Thursday after receiving a phone call earlier this week from the retailer. Though the fate of the controversial "big box" ordinance won't be decided until the next City Council meeting--at the earliest--the proposal may have claimed its first casualty this week when the construction of a Southwest Side Target store was put on hold. The retailer saying they were going to put off plans to open a store in her ward next year. Austin said outside a meeting of the Committee on Zoning that she thought Target would cancel its construction entirely if the ordinance passes. Such a pull-out, she said, would be a crushing blow to her community.

"It will be devastation for us because this is our best source of revenue," she said. "Our largest employer in the 34th ward is the police department; the second largest for us would be Jewel. We have no resources because we're at the city limits." Meanwhile, other aldermen--both proponents and opponents--weighed in on the ordinance, a divisive measure that calls for a minimum wage at retailers larger than 90,000 feet. So even while the bill is on the back burner, tensions remain simmering in the corridors of City Hall. Austin said she thought Target's seemingly sudden change was more than just an idle threat. And if Target pulls out of the planned shopping center, where it was slated to stand side-by-side with such large retailers as Home Depot and Circuit City, others will follow suit. "One goes with the other," she said. "If Target goes, I just feel like Home Depot will go too." Ald. Tom Tunney (44th), who is also a small business owner and vocal opponent of "big box," added to Austin's criticism. He said the plan, which has been debated for many months, would ultimately lead to fewer jobs and hurt all businesses in the community--especially the small businesses it was designed to protect."You're telling employers that they need to pay $10 plus $3 in benefits," Tunney said. "If there's a Wal-Mart in the community, every business will be affected, sooner [rather] than later." Tunney owns three of the four Ann Sather restaurants on the North Side, where, he said, workers start at the minimum wage but have a chance to work up to better pay and benefits. On Thursday, Tunney said that the "big box" ordinance threatens to put him out of business because he would have to raise labor costs to keep workers from applying to larger stores. "If a Wal-Mart replaced Wrigley Field, every business in Lakeview would be paying $10 plus $3 and that shock on the system is going to reduce incentives for employers to open their doors," he said. "Ann Sather may just close," he added. "Our labor costs in the restaurant business is close to 40 percent now...We've got a property tax bill that has tripled. Now how much can you put on small business--especially if they own the real estate--before they say: 'Wait a second, I'm in the wrong business.'Instead Moore accused the measure's opponents, like Tunney, of talking tough to intimidate aldermen into voting down the proposal"I don't see how they could close," he said. "They're not affected by the ordinance.""All I can say is, Chicken Little is alive and well in the City of Chicago," he said. "Everyone's talking about the sky is going to fall...Since they have failed to beat the ordinance on its merits, they're now resorting to scare tactics."

Some Alderman Agree

Ald. Leslie Hairston (5th) said she has a letter of intent from Target to build a new store at Marquette and Stony Island in her ward. But, the developer has told her the store is now “on hold” and that Target may close existing Chicago stores if the big box ordinance goes through. Hairston called it little more than a scare tactic. And even if the threat turns out to be real, she’s standing firm in support of organized labor.

“Wal-Mart and Target could pay their people a living wage. Then, we wouldn’t have this problem and people could actually live on the money they made,” Hairston said. “My position is my position. They’ll do what they have to do. I’ll do what I have to do. If they want to lose the more than $3 billion that is not being captured in my ward, that’s a bad business decision for them.”

Ald. Joe Moore (49th), chief sponsor of the big box ordinance, accused the tag team of Target and Wal-Mart of using “bullying tactics” to stop a train that has already left the station.“It’s an idle threat…They’re clearly trying to …initimidate members of the City Council. I am very hopeful that members will hold firm….The votes are still there,” Moore said. He predicted 33 votes for the ordinance, “maybe more,” even though Daley has been button-holding aldermen to try and stop it.

Note:Excerpts Courtesy of and Full Story from The Tribune and RedStreakHere's the OrdinanceBig Box Living Wage - Substitute Ordinanceand an Alert from the 49th Ward Service OfficeALERT: FINANCE COMMITTEE PASSED BIG BOX LIVING WAGE ORDINANCE ON 6/21/2006 WITH MODIFICATIONS. VOTE BY FULL CITY COUNCIL EXPECTED 6/28/06 DID NOT OCCUR. MOTION WAS MADE TO DEFER AND PUBLISH. IT WILL RETURN FOR A VOTE ON WEDNESDAY, JULY 26 AT 10:00 AM. CALL 773.338.5796 FOR DETAILS.

2 Comments:

The city's approach to attracting and retaining businesses large and small is baffling and shot through with bizarre contradicions, and so is the public's attitude toward these stores. Why entice one of these behemeths into your neighborhood, by means of tax-subsidized abatements and other inducements, so they can destroy the local aesthetic with a parking lot big enough to have 2 zip codes, just so you can drive the place out to the burbs 5 years later by passing an ordinance like this?

On one hand, these 'big box' retailers are generally the beneficiaries of TIF financing and/or 10 and 20 year tax abatements. Walmart, just one example, will not build without such an inducement.

What that means, of course, is that the taxes lost because of the abatement must be offset with higher taxes for everyone else, which means that businesses that do not receive these tax-funded goodies are forced to subsidize their own destruction.

The living wage ordinance sort of takes what the abatements and TIFs give, but drives business out of the city, and is moreover discriminatory and extremely unfair in that it targets some businesses while exempting others. This is not the way to rectify the growing disparity in incomes in this country and city.

I can't help but believe that there is a positive correlation between the tax-supported 'gimmes' for Lowes and Home Depot and every other large business in this country, and the fact that an a worker making less than $10 an hour can no longer afford to live here. A few more tax abatements and $400MM TIFs, and NOBODY who doesn't make at least $175K a year will be able to live here, or anywhere else, and the 'living wage' won't begin to offset the damage done by stripping the population to pay for these boondoggles that only give us bad development and a superfluity of bankrupt shopping malls.

Therefore, I would rather take the route that is both fair and economical, which is to put an end to all the tax-supported corporate welfare that is bankrupting municipalities across the country and elevating the cost of living and doing business for everyone else. Then, perhaps, our tax burdens, hence our costs of living and doing business would be lower, enabling our poorest workers to get by on a market wage.

i agree with many of your well thought comments. i'm always more than a little leary when government starts tinkering with the free market system. we always seem to find out later that there are consequences that are unintended and actually end up hurting those that are supposedly being helped.

although i don't shop at walmart, i do shop at some of the other big boxes sometimes and so do many people who are earning a lower wage than most. it isn't a stretch to expect these retailers to raise the cost of their merchandise to cover the increase in operating expenses and who do you think will be the most affected when that happens?

i can understand the anxiety now in some of the most economically depressed wards that are depending on the investment of 1 or more of these retailers in their neighborhoods for jobs. many of these areas are so depressed and rundown and job are so scarce, there is no aesthetic to ruin;only opportunity lost if these stores decide to pull out.

i guess i would rather have seen a wage hike across the board for all minimum wage workers, not just targeting this selective group of businesses. seems like a slippery slope once that line is crossed.